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Xometry CFO’s Quest for “The Price Is Right” | CFO

At large companies, many CFOs are only peripherally involved in pricing decisions. It’s often different at smaller firms, where finance chiefs tend to wear more hats. But even there, it’s probably quite rare for pricing to be the CFO’s primary focus, as it is at Xometry.

In fact, the opportunity to instill more rational pricing into a market niche was a key formative element for the company.

A few years ago, Xometry’s two co-founders, chief executive Randy Altschuler and CFO Laurence Zuriff, were investigating business opportunities in the on-demand manufacturing arena. They were attracted by the high level of technological innovation in the space, particularly with respect to 3D printing (also called additive manufacturing).

The pair visited lots of machine shops and additive manufacturing service bureaus. “We discovered that they were largely mom-and-pop-type operations where a rollup of any kind would not make sense,” Zuriff tells CFO. “What we also discovered was that there was incredible price opacity in that marketplace.”

They observed extreme pricing differentials for very similar manufactured parts in different geographic locations, as well as variances from week to week or even day to day. That, of course, posed problems for the manufacturers’ customers.

Pricing “could change overnight, depending on shifts in supply and demand in very localized markets,” says Zuriff, a former managing director at investment manager Granite Capital International. “While that was probably pretty efficient on a local basis, it was inefficient on a national basis.”

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Xometry CFO’s Quest for “The Price Is Right”.